The Australian investment outfit that raised money for failed streaming music firm Guvera has hit out at a lawsuit being pursed by one of its former investors who claims that he was suffering from Alzheimer’s disease for much of the time he was pumping money into the digital music shambles.
The fundraising methods of Amma Private Equity, headed up by Guvera co-founder Darren Herft, have been in the spotlight since the collapse of the digital music business earlier this year. The finance firm has also been sued by Keith Messer, an 80 year old farmer who allegedly invested $8.7 million into the Guvera company over two years.
According to The Courier Mail, the litigation claims that Messer started investing in Guvera after meeting Amma reps in 2012. The lawsuit says that he was diagnosed with Alzheimer’s disease the same year and that the illness then “progressed significantly”, to the extent that Amma officials should have noticed that their investor was now struggling to comprehend the complexities of the investments he was making.
It’s also alleged that Messer’s daughter met with Amma in 2014 to advise them of her father’s condition, and that he “did not understand the investments, he had no paperwork … and that he did not wish to further invest in Guvera”. But, it’s claimed, Amma secured a number of further investments from Messer in the following eight months.
The investment company has now responded to the lawsuit, denying the allegations made against it. In its legal filing, Amma says that Messer “confirmed that he understood the nature of the music streaming application and the business model of Guvera” and that their investor “asked detailed questions about the investments which indicated that he understood the nature and risks associated with purchasing the shares and [that he] had researched [Guvera’s] business model”.
Amma’s response also takes issue with the claim that Messer was a “retail investor”. As previously reported, it has been alleged elsewhere that the investment outfit employed a sneaky scheme so to avoid legal obligations to provide “unsophisticated investors” with extra documentation, designed to ensure that they are fully aware of the risks of any one investment. But, Amma says, Messer was a “sophisticated investor” because his accountant supplied documentation to that effect and he had more than $2.5 million in assets.[from http://ift.tt/2lvivLP]